Path To Profits Lies Within Asia, Transmeta Says

This site may earn affiliate commissions from the links on this page. Terms of use.

Transmeta Corp. will begin showing off a 1.6-GHz Efficeon processor at the Computex show next week in Taiwan, part of the company’s renewed commitment to the Asian market.

Transmeta executives said they hope to extend their appeal to the Chinese PC market as well as Taiwan manufacturers, who actually build the PCs which later sport logos from Dell or Hewlett-Packard.

Although the low-power processor company planned to cut a wide swath in the notebook market with its Crusoe processor line, Japan has become the company’s key market. Now, Transmeta has opened sales offices in China and Korea.

Meanwhile, the company continues to tread water. Transmeta’s innovative power-saving technologies keep the company in the industry spotlight, such as the LongRun 2 technology that the company recently licensed to NEC Electronics. Every quarter, however, the company still loses far more money than it pulls in.

In the first quarter of 2004, for example, Transmeta lost $23.4 million on revenue of $5.2 million. In the fourth quarter of 2003, Transmeta’s public offering netted the company $78.4 million before expenses, increasing the company’s cash holdings to $130.0 million. But Transmeta still lost $87.3 million on revenue of $17.3 million, largely negating the proceeds from the IPO. Svend-Olav Carlsen, the company’s chief financial officer, plans to resign in June 2004 in order to accept a new opportunity with a privately held company, Transmeta said on May 17.

Before Transmeta launched the Efficeon last fall, the company had gone about a year without the launch of a “serious” product,” said Nathan Brookwood, an analyst with Insight64 in Saratoga, Calif.

“The challenge now is to get some revenues on Efficeon,” Brookwood said. “They’ve got some significant Japanese suppliers signed up to go around again. If that works, the might be actually able to make some money instead of just taking it out.”

In expanding its power base in Japan and Taiwan onto the mainland, Transmeta has opened two new offices, one in Shanghai, China, and the other in Sungnam City, Korea. The company is now working with a Chinese marketing and PR firm in Beijing, and has designed country-specific web sites for China and Taiwan.

Transmeta executives hope that the new offices will convey the message that the firm is serious about its Asian expansion, and that China has evolved into an engineering partner as well as a potential market. “Historically, a lot of designs have been done in Taiwan but the building has been done in China,” said Greg Rose, director of marketing for Transmeta. “A lot more engineering is done in China these days, and we need the local support running there instead of out of the Taiwan office.”

Typically, “original design manufacturers” like Quanta Computer or Compal actually build the products that PC OEMs later ship under their own brand name. Rose said the final decision as to what processor is included in the notebooks is still usually made by the customer, but that the opinion of the ODM also plays a role.

“Really what it means to have a good sales strategy is that you need to have a kind of double prong  on working with the Tier 1 (customer), and the other providing a level of support to the ODMs,” Rose said. “A successful sales office working with local on-site engineering resources can make sure a customer brings his product to market on time. There are Tier 1 expectations of this level of support, to make sure the ODMs hit their projected (ship) date.”

At the Computex show, Transmeta will show off the 1.6-GHz Efficeon as well as a working demonstration of the LongRun 2 technology, which provides fine, automated control of the chip’s power to extend the system’s battery life as long as possible. Transmeta will also have systems demonstrating the “No Execute” function, designed to prevent buffer overflows when used in conjunction with Microsoft’s Windows XP Service Pack 2. AMD, Intel, and Via have also announced NX support.

The Efficeon will take on the Via C3, the AMD Geode, and other low-power processors in the Asian market, which is growing faster than in North America, Brookwood said. A number of Asian suppliers who started out in the motherboard market have moved into barebones desktop systems and more recently into “whitebooks”, bare-bones notebook PCs that can be rebadged and modified for the needs of specific end markets.

“All of those dealers would love to be able to take one of those whitebooks and say, ‘Hey, look, I offer notebooks now, too,'” Brookwood said.

This site may earn affiliate commissions from the links on this page. Terms of use.

ExtremeTech Newsletter

Subscribe Today to get the latest ExtremeTech news delivered right to your inbox.

Email

This newsletter may contain advertising, deals, or affiliate links. Subscribing to a newsletter indicates your consent to our
Terms of Use and
Privacy Policy. You may unsubscribe from the newsletter at any time.